Pfizer Offers Deals to Keep Lipitor Users as Patent Expires

Pfizer Inc. will see the end of a hugely lucrative era on Wednesday when its two-decade old patent for Lipitor, a popular drug for cholesterol management, expires. The loss of patent rights means that generic versions of the drug can now go on sale; the immediate fallout of that situation will be significant discounts as newer entrants seek to profit from a drug that has generated approximately $10.7 billion in sales last year. As many as 8.7 million Americans depend on the drug, categorized as a statin, to manage their cholesterol levels

Lipitor or Atorvastatin Calcium?

As the debate between branded and generic products rumbles on, Lipitor's loss of patent has shot off a slew of questions, particularly from patients who are dependent on the drug, and the real possibility, now, of cheaper versions flooding the pharmacies. Medicare and insurance policies on generic statin medications are being considered, in order to help patients transition safely to generic competitors.

Lipitor's off-patent status is seen as beneficial for patients as they eagerly wait for the lower insurance co-payments usually linked to generic medicines. Insurance co-payments are expected to drop considerably, if patients opt for generic atorvastatin calcium.

How will Pfizer repond? Pfizer's strategy to override its loss of patent rights on its best-selling drug has resulted in deals with drug-benefit agencies by providing discounts to patients for prolonged use of the drug even after its loses patent rights. This is seen as a move to sustain a part of its $11 billion annual sales from Lipitor and a bid to hold on to its market exclusivity.

Meanwhile, there are also plans to introduce a new over-the-counter variant of Lipitor in the long run, which could, perhaps, counter the onslaught expected from generics.

Pfizer is working with drug benefit managers such as UnitedHealth, the U.S.'s largest health insurer, and Express Scripts to pass on discounts to patients for buying Lipitor instead of prescribed generic versions at drugstores. Pfizer's tactics are expected to enable United Healthcare to charge lower co-pays for branded Lipitor. Pfizer is expected to strike a similar deal with Express Scripts.

Pfizer intends to push existing patients to stay on Lipitor for the first 180 days, based on the deals that Pfizer has negotiated with benefits managers and health insurance providers. This is to stave off initial competition by offering Lipitor at the same price as its generic counterparts that are likely to flood the market.

In another move, Pfizer has negotiated terms with Medco Health Solutions Inc., a pharmacy-benefit manager, to supply Lipitor through its direct-mail service. Pfizer's Lipitor.com Web site is the other conduit to setting up an online direct mail service for selling Lipitor.

In the wake of these new changes, patients have been encouraged to talk to their doctors about getting prescriptions for the generic versions of Lipitor or working with their health plan providers to stay on Lipitor at lower co-pays.

Pfizer has reportedly been offering to help cut the co-pays of eligible patients to as little as $4 a prescription for branded Lipitor. Pfizer will cover up to $50 of a copayment for every prescription through December 2012.

Patients can sign up at the Lipitor.com Web site and receive a co-pay card that will entitle them to the benefits at local pharmacies. But patients on a federal or state-sponsored program, including Medicare, would not be eligible for the scheme.

Currently, Lipitor has been on a higher, branded tier for prescription drugs. Co-pays for branded drugs average either $29 or $49, depending on the tier, states a report by the Kaiser Family Foundation, Co-pays for generics average $10.

With the new changes in the statin market, it just could be a win-win situation for all, as consumers benefit from low-cost generics while having the option to stay on with the original Lipitor at cut-back prices. The question, though, is how long they can continue to do so.